Correlation Between Graphic Packaging and Bond Fund

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Can any of the company-specific risk be diversified away by investing in both Graphic Packaging and Bond Fund at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Graphic Packaging and Bond Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphic Packaging Holding and The Bond Fund, you can compare the effects of market volatilities on Graphic Packaging and Bond Fund and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Graphic Packaging with a short position of Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphic Packaging and Bond Fund.

Diversification Opportunities for Graphic Packaging and Bond Fund

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Graphic and CFACX is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Graphic Packaging Holding and The Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund and Graphic Packaging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Graphic Packaging Holding are associated (or correlated) with Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Graphic Packaging i.e., Graphic Packaging and Bond Fund go up and down completely randomly.

Pair Corralation between Graphic Packaging and Bond Fund

Considering the 90-day investment horizon Graphic Packaging Holding is expected to generate 5.46 times more return on investment than Bond Fund. However, Graphic Packaging is 5.46 times more volatile than The Bond Fund. It trades about 0.05 of its potential returns per unit of risk. The Bond Fund is currently generating about -0.12 per unit of risk. If you would invest  1,421  in Graphic Packaging Holding on July 4, 2022 and sell it today you would earn a total of  553.00  from holding Graphic Packaging Holding or generate 38.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

Graphic Packaging Holding  vs.  The Bond Fund

 Performance (%) 
       Timeline  
Graphic Packaging Holding 
Graphic Performance
0 of 100
Over the last 90 days Graphic Packaging Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Graphic Packaging is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Graphic Price Channel

Bond Fund 
CFACX Performance
0 of 100
Over the last 90 days The Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Bond Fund is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CFACX Price Channel

Graphic Packaging and Bond Fund Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Graphic Packaging and Bond Fund

The main advantage of trading using opposite Graphic Packaging and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphic Packaging position performs unexpectedly, Bond Fund can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bond Fund will offset losses from the drop in Bond Fund's long position.
Graphic Packaging vs. Amazon Inc
The idea behind Graphic Packaging Holding and The Bond Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Bond Fund vs. Home Depot
Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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